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Thu, Feb 05, 2009 - Page 10 News List

BHP Billiton posts 56.5 percent fall in six month profit

AP , MELBOURNE, AUSTRALIA

BHP Billiton Ltd, the world’s biggest mining company, warned yesterday of continued volatility in commodities markets and falling demand for its products after reporting a 56.5 percent drop in first half profit.

Net profit for the six months to Dec. 31 last year fell to US$2.617 billion, from US$6.017 billion in the previous corresponding period, the Anglo-Australian company said in a statement to the Australian Securities Exchange.

BHP Billion said commodity price weakness and volatility in commodities markets will continue and that it is witnessing further demand contraction for its products.

“We believe it is likely that uncertainty will extend into the medium term,” the statement said.

“However in the long term, we expect continued strong growth in demand for commodities from China and other emerging economies,” it said.

BHP Billiton said that during the first half it witnessed an “unprecedented” fall in commodity prices, with market prices falling in the order of 50 percent.

“As the global economy continues to deteriorate, we are witnessing further demand contraction for our products,” it said.

“We believe it is likely that uncertainty will extend into the medium term,” it said.

BHP Billiton’s profit from operations for the half year fell 23.8 percent to US$7.224 billion, from the previous corresponding period’s US$9.486 billion.

BHP Billiton said costs increased by US$1.872 billion compared to the corresponding period.

Revenue for the half year increased 16.6 percent to US$29.78 billion, as underlying earnings before interest and tax rose 23.7 percent to US$11.9 billion.

BHP Billiton said its operating results were robust given the deterioration in resources markets.

“We continue to focus on our cost performance and expect to see the benefits of falling input prices, albeit with some lag,” it said.

BHP Billiton raised its interim dividend by 41.4 percent to US$0.41 per share.

The result was dented by mine closures, asset impairments and costs associated with the abandoned bid to take over rival Rio Tinto Ltd.

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